For Now, Marketing is More Important Than Innovation

It seems as though the past year I’ve heard a lot of people with early adopter tendencies, especially the media, complain about the lack of innovation coming from the tech industry. It again up again at CES this year. Quite frequently I heard from people that there was nothing ground breaking or truly innovative at the show. Now we can define innovation in many different ways where even simple improvements can be innovative. But I think it is important to point out that true limit pushing, ground breaking innovation is cyclical not annual. We are coming off the re-invention of two primary technologies categories, the smartphone and the tablet. Furthermore we are in the midst of now re-defining what a personal computer is, does, and looks like. Of course I believe innovation is still around the corner but I think there are some important market truths that need to be pointed out.

Innovate Then Communicate

Innovations fail if they can not be marketed. Sometimes I think the importance of effective marketing is taken for granted. I think many industry observers simply assume that when something innovative is released that everyone will magically understand it at a glance. The truth is, even the simplest innovations need effective marketing if they are to be embraced by the mass market.

This is the cycle we currently find ourselves in. This is why it actually becomes much easier to discern the winners and losers by judging not just the product but also the marketing. Great products have the potential to fail to be considered by the mass market with poor marketing while at the same time bad products do not get embraced by the mass market even with great marketing. Great products require great marketing.

There is also the danger of over innovating during a market’s maturity process. When this happens a company tries to add too many bells and whistles and runs the risk of it being too much for the market to handle. Thus their market doesn’t grasp the value of all the new features, or perhaps it just isn’t ready.

Marketing Matters in Mature Markets

Perhaps the most fundamental point for the reason we are in the marketing driven cycle we are currently in is due to the market largely being a mature one. Mature markets function very different than when they are maturing. As a market is maturing it is receptive to more limit pushing innovations. As the market reaches maturity it is more receptive to the marketing of that mature product in order to drive its growth from the early adopters and into the mass market.

Early adopters are important segments for every company to understand because the things they value today will be the things the mass market of tomorrow values in the future. Early adopters rely heavily on new, cutting edge, and innovative features. They appreciate the wow factor, the things that no one else has and they can be the first to embrace. However the mass market is often more down to earth and doesn’t necessarily understand why the flashy, shiny new gadget adds value to their life and is truly useful. Luckily for companies the mass market is significantly larger than the early adopter market. The billions need marketing to help them understand why they need something, the millions need to be wowed by something. Moving from early adopters to the mass market is the fundamental key to a product’s success and that is where marketing comes in.

We also have to understand that the demand to innovate by companies also catches up with technological limits. Many of the things in labs that I have seen that I think can lead to the next round in innovation for smartphones and tablets, like flexible displays, new semiconductor process technology, battery science, etc., are still years away for being ready for mass commercialization. This is why we should simply expect more evolutionary hardware than revolutionary.

This happens all around us, especially in post mature markets. Look at the automobile industry for example. We don’t see revolutionary hardware on an annual basis. If fact we rarely see it at all.

The Myth of iPhone Fatique

I’m in no way saying innovation isn’t important. Just that it is cyclical and we need to understand where we are in the innovation cycle. Maturing product segments require time for original innovations to be adopted by the mass market. To make this point, I’d like to address something I think is interesting. From many early adopters I know, it seems as though they frequently complain that iOS feels dated. For the early adopter this is the challenge. They adopt technologies extremely early and then have to wait for the rest of the market to catch up. As per iPhone fatigue, for many (hundreds of millions of people) they will be experiencing the iPhone and iOS for the first time throughout the next few years. For them there is no such thing as iPhone fatigue. This is the point that many early adopters miss.

Believe it or not, marketing is more important than innovation in the cycle we are currently in. Value needs to be communicated to the mass market. People need to be shown the usefulness of a product or feature and fully grasp the why not the what. Too many companies market the what not the why. Anyone analyzing any company in today’s market needs to heavily evaluate said companies marketing plan as much as the product itself.

Innovation at its best solves problems. Great marketing communicates the value the innovation is bringing to solving a problem people either knew or didn’t know they had. In my opinion there is only one tech company who currently does this well.

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

“Look at the automobile industry for example…we don’t see revolutionary hardware on an annual basis…in fact we rarely see it at all.”

I’m not sure the mass market would accept revolutionary hardware in cars and that could be why we seldom see it. But it’s coming now, in self-driving cars. Those might be the biggest revolution since 1900.

jfutral

“Great marketing communicates the value the innovation is bringing to solving a problem people either knew or didn’t know they had.”

I remember when McDonald’s hit the market with fast food breakfast, aka the Egg McMuffin. That took a great deal or marketing and patience on their part to convince people that they no longer had to eat breakfast at home or make time for a diner. Health considerations aside, look where we are now.

Joe

jfutral

As for technology marketing, Samsung is the only company outside of Apple I see marketing the “why”, even if sometimes the “why” is a snarky stab at Apple. HP was doing that well for a while. I really liked their laptop ads and their printer ads a couple years back. It’s no wonder they are still the number 1 PC vender.

Joe

capnbob67

Only just and not for long… I’m not a fan of Lenovo’s marketing but their growth strategy (probably built on cheap PCs for the home market) seems to be working out for them rendering their US advertising relatively immaterial. Still horrible commodity profits though… HPs (were) much better).

jfutral

Since, HP has declared (and practice?) they are exiting the consumer PC market, this makes the feat even more amazing to me. Speaks well for the brand they built. Jobs was right to fight for Hurd, if reports are true. If I were a Wintel user, I would go HP.

Joe

capnbob67

HP retracted their departure from the market when it became apparent that no-one would buy the PSG. They are playing for keeps now and struggling though their residual brand is still strong. Remember, a large part of their PC sales are enterprise sales so that consumer marketing is not the only mover.

Hurd is the James Dean of HP – we’ll never know what he would look like “old and fat”.

benbajarin

I agree Samsung is probably one of the other few who seems to understand this. That being said they market the why but I’m not sure they are marketing the right “why” enough, or at least the why that the mass market cares about.

jfutral

Yeah, I’m not so sure how much Samsung actually _understands_ other than that they are smart enough to follow by example, which is already better than most in the industry. I mean (not to get into the whole samsung copies/doesn’t copy argument) when I read a Samsung exec talk about creating their own ecosystem like Apple’s they at least see where money is being made, though they may miss the nuances and details that make the system work well, which is probably why they need to spend so much more on marketing than Apple.

Joe

capnbob67

Samsung spends >$15Bn a year bribing carriers to stock and promote their mobile products. That is the marketing that drives their success, not the attack ads to a bunch of nerds who were never going to buy iPhones anyway. The iPhone 5 will sell more in the last 1 quarter than the S3 has since release in Q2 2012 despite the massive disparity in spend.

For reference, the Surface has sold <1M units despite a ton of US/UK advertising. Also Samsung's tablets sell like crap despite large ad budgets.

mhikl

Yes, bells and whistles work for the quick sell for some, and may satisfy some “early adopter” for a while, but very often the tinsel products fail to keep their shine in usefulness. How often and practical a feature continues to be may be the better gage. It is quality, practicality and stayed usefulness that endures. Apple’s key is its innovative iterations that make the product (iPhone, iPad, its computer line) along with its infrastructure (derided by some) that continually marvels the user. Then there is the tortoise/hare game with the tortoise leveraging its side alleys that makes for sudden change to the dimensions of the game.

I am amazed how often my iPad and iPt continue to meed new needs just as I am impressed how often the analysts from TechPinions find clear perspectives that enlighten.

capnbob67

Excellent article. A breath of common sense in a world of yapping early adopters.
Companies need to reap the rewards on their investments which is done by selling 100s of millions of devices before you totally retool for whole new categories or radically different form factors etc. Apple must repay its massive investments in its manufacturing partners, and its relatively small marketing budget, Samsung must repay its $20Bn+ per year it spends in mobile device marketing (ads plus carrier incentives).

Constant “innovation” (even if that were possible defined as stupidly narrowly as the yapping classes think it should be – e.g. game changing new product category every year or 2) would be a short trip to the poor house for most companies…

Matang_Lawin

Great article mate. A case study for every tech company aspiring innovation is Apple at During Steve Jobs Era. Great marketing Guru.

terry

To make money yes, definitely. But how about for the sake of innovation itself? I think equal importance to both as for now, we are redefining what is a personal comouter, as you said. Thus, there nust be an innovation that can cater to the majority’s needs

http://www.invisume.com/ Sheine Bosh

I think we need to focus on answering the question, “what’s more important, marketing or innovation?” I can give an answer. The answer would be neither. We should think instead that marketing and innovation as working together as a pair of gears to help move your entrepreneurial success engine forward. The point is there should be strong connection between marketing and innovation. As what I observed on Invisume’s operation, it helps salespeople know how to keep innovation and marketing working together. It links salespeople with innovative companies.